Blitzscaling Microsoft, PayPal and Linkedin

Blitzscaling is the strategy that leading entrepreneurs have implemented to build strong, enduring companies. The techniques allow for startups and incumbents across any industry to scale at rapid rates and outdistance the competition.

This episode of Greymatter is a discussion from Greylock’s Blitzscaling Dinner with Microsoft CEO Satya Nadella and Greylock partner Reid Hoffman. The two visionaries discuss the importance of consistency when scaling company culture, tactics to push forward new strategies with your board of directors, and steps to mitigate the unintended risks of blitzscaling.

Greylock’s invite-only event hosted CEOs, company founders and top CXOs to discuss the impact of blitzscaling across today’s leading companies and ways that Microsoft is applying these techniques as an established company. Below are key takeaways and quotes from the discussion.

Blitzscaling Company CultureConsistency is key to building a great company culture. Building or renewing company culture is not a one time transformation, but a continuous process led by leadership. To set precedence, founders should figure out company values in the beginning and live those values over the lifetime of the company. Over time, employees will know what the company stands for and attract new hires who would naturally fit in with your environment.

There’s not a single meeting at Microsoft that I don’t somehow manage to go to our mission and our culture. And I’ve done it now close to five years. I am so disciplined about it because, that is my unit of scale. The day I stop doing it, the entire motion will fall apart. Consistency was one of the biggest things that you underestimate. You’d keep repeating and you think “God I’ve said this, I should change it a little, make it a little more novel and interesting.’ Don’t.- Satya Nadella

Blitzscaling With Your Board of DirectorsThe board of directors will understandably be cautious when you introduce a new blitzscaling strategy which tends to involve some risks. To ease fears and push forward your agenda, founders can implement three techniques: design an evaluation framework that enables the board to track performance, add a board member who believes in the new strategy and can help push forward your effort, and invest in board education. New strategies and new technologies can be difficult to understand. Founders should set up board training sessions to provide further insight and explain why specific risks are worth taking.

One of the things that at least I’ve realized is what’s the framework for (the board of directors) to evaluate me and my management team on the judgment we’re passing. And there quite honestly this is where being transparent, being super intellectually honest is the most helpful thing in high risk businesses like ours. I’ve learned the most important thing is- don’t think that they’re passing judgment on the strategy, they’re passing judgment on your judgment of strategy.- Satya Nadella

There are also two other techniques. One is, a board has a number of people, add someone who’s the catalyst to the board. Have that be an explicit conversation with them about, “Look, I think this needs to be going this way, do you buy in?” And then in some cases, I think one of the things that’s very useful to do is to really invest in some board education. They need to understand this. And say, “Look, in order to do this, we need to set up a one day, two day training thing and you need to come for it in order to do it”, and that’s a big cost and a big play. But sometimes that’s the only thing that actually works. — Reid Hoffman

Responsible BlitzscalingUnintended consequences can happen as organizations rapidly scale. It’s the founder’s ethical responsibility to consider the negative impacts each decision may have the company or product has on customers and society. To maintain safety of customers, founder should have build in processes early on that are meant to mitigate unintended consequences. To enhance company trust, founders should implement safety and ethical regulations that are agile to allow for innovation over time.

I’ve come to realize is, day one, while you’re building that product or service that obviously needs all the scale, you would be better served to construct even in its core business model and in the unit of scale, a way to deal with the unintended consequence. So the more you have thought through what are the unintended consequences that you will be unleashed when you are at scale day one. — Satya Nadella

There’s a way to propose a lightweight set of regulatory frameworks that enhance trust, still create the maneuverability for innovation, and aren’t trying to just do what people classically think of companies. — Reid Hoffman